Peak OilThe Coming Saudi Oil CrisisMatthew Simmons, CounterPunch
As oil becomes a scarce resource, its use will have to be rationed in one way or another. There are ways to allocate oil use and direct it to its most valuable applications. But achieving such a rational plan will require a carefully orchestrated, global, country-by-country effort. Left unattended, this process could quickly evolve into genuine chaos. The global economy can function after oil supplies peak, but not in the same manner in which we live today.

Once oil supply peaks, the world will be forced to create ways to substantially conserve our oil and other energy sources. This shift should force a rapid rethinking of the notion that transporting people and products anywhere in the world is an almost incidental cost of doing business. "Transportation" turns out to be the biggest single user of oil, and we need to begin finding ways to minimize everyone's transportation needs and make the use of transportation fuel as efficient as possible.
(21y June 2005)Excerpt from Matthew Simmons' new book, Twilight in the Desert. Big Gav of Peak Energy points out the rich irony of leftist CounterPunch publishing investment banker Simmons. Peak oil makes for strange alliances. -BA

Treehugger interviews KunstlerLloyd Alter, Treehugger
James Howard Kunstler is the author of the provocative and controversial The Long Emergency,and graciously agreed to be interviewed by Treehugger. We post the interview here and apologise for asking such long questions, we do run on. We also asked him to pick one of our readers' questions and he answered all of them, which we will post tomorrow.
(21 June 2005)Long interview, better than the generic Kunstler interview
See the follow-up in Treehugger: Questions from Treehuggers for Jim Kunstler.

One energy forecast: Oil supplies growRon Scherer, Christian Science Monitor
NEW YORK – According to the Association for the Study of Peak Oil & Gas, the end is near - when the earth's oil reserves start to run dry and scarce petroleum will go to the highest bidder. Seers have written books detailing that time, and websites such as EnergyShortage.com forecast a steady rise in prices - such as Tuesday's oil price of more than $59 a barrel.

Not so fast, maintains a new report issued Tuesday by the widely respected group Cambridge Energy Research Associates (CERA). Instead of the wells running dry, CERA says petroleum supplies will be expanding faster than demand over the next five years, according to an analysis oil field by oil field. In good news for the SUV set, the new oil will be light, sweet crude - ideal for making gasoline. And since supply will grow, CERA forecasts prices will fall, possibly below $40 a barrel.
(22 June 2005)About the CERA report, Big Gav writes:

Fueling Fears
Deffeyes vs CERAHarold Brubaker, Philadelphia Inquirer
...Kenneth S. Deffeyes, a retired Princeton University geology professor, is among the "peak oil" prognosticators arguing that mankind is heading into the downside of the age of oil.

Peak-oil proponents are not saying that the Earth's store of crude is nearly gone. Rather, they say it is nearly half gone, and daily production will begin slowing - while growth in demand continues, according to Deffeyes.

"I'm very concerned about the five-year time scale. There's not much we can expand rapidly on a five-year time scale" to make up for a shortfall in oil, he said in a recent interview at his home in Princeton.

But Cambridge Energy Research Associates asserted just the opposite yesterday in a report predicting that oil production capacity could exceed demand by more than six million barrels per day by the end of this decade - far above the current margin of one million barrels per day
(23 June 2005)Another local reporter digs deeper into the CERA story. NY Times, national media, where are you? -BA

Even more bold is the prediction's timing, just as the benchmark price of oil is on the verge of cracking $60 (U.S.) a barrel and futures contracts suggest oil will remain higher than $55 for the rest of the decade.

Cambridge Energy Research Associates Inc., based near Boston, is skeptical, and yesterday released highlights of a report that concludes the world's capacity to produce oil will likely easily exceed the world's voracious demand for the product that fuels cars, ships and planes.
(22 June 2005)

[The book] Peak Oil Paradigm Shift - The Urgent Need For a Sustainable Energy Model examines the need to re-think and re-tool the world’s energy model in the face of a rising demand for oil that is becoming increasingly more difficult for oil producers to supply.

Written by Bilaal Abdullah, a Petroleum and Software Engineer from oil-producing Trinidad and Tobago, the book examines the possible effects of Peak Oil on developed, developing and underdeveloped countries and the implications for geo-politics, economic development, climate and lifestyle changes.
(21 June 2005)Suggested by ldcdnd. Related articles appear on other pages of the Peak Oil Paradigm Shift website.

Peak Oil and PermacultureTim Winton, Permaforest Trust via Argentina Indymedia
...explains the dynamics of the impending peak in global oil production and the implications for Australian society. Declining energy availability will spell the end of global economic growth and the consumerist culture it supports.
(21 June 2005)Suggested by ldcdnd. This article by Australian permaculturalist Tim Winton has popped up on several Spanish-language websites. For more by Tim, see his audio and slide presentation on Peak Oil.

3. ...JEANETTE FITZSIMONS (Co-Leader—Green) to the Minister of Energy: Does the Minister stand by his ministry’s view: “It does not foresee a resource-driven crisis in oil supply in the foreseeable future.”, given today’s statements by the National Australia Bank that there is considerable opportunity for the oil price to exceed $60 a barrel, and by OPEC that it has “limited means to tame the market, as most producers are already pumping flat-out”?

Hon TREVOR MALLARD: The advice that I have received does not quite back up what the member is suggesting. It is that there are two main factors around the current very high oil prices. One of them is in the area of current supply issues—actually getting oil out of the ground in some places where it has already been found. The other factor has to do with what might be described as the global geopolitical situation—areas that the Minister of Foreign Affairs and Trade would be more aware of, especially in the Middle East—which is certainly hampering some supply.
(22 June 2005)This is a very long transcript. Use the search function in your browser, specifying "peak oil."

China oil output moving towards peakStaff, Pakistan Daily Times
BEIJING: China’s surging oil demand has captivated markets and captured headlines. The quiet, steady growth of its domestic crude production — which is larger than most OPEC nations — has received less attention.

But as China’s core oilfields grow older and new finds fewer, output will one day peak, revving up the race for international supplies in order to sate rapid demand growth while making up for declining reservoirs in the world’s No. 2 oil consumer.

Chinese officials are confident that day is at least a decade away; some Western experts expect it far sooner than that.
(23 June 2005)

Boone Pickens Sees Oil Prices Going HigherBrad Foss, Associated Press via Business Week
Oil tycoon Boone Pickens' bet that energy prices would rise made him more money in the past five years than he earned in the preceding half century hunting for riches in petroleum deposits and companies.

And even as crude futures have doubled since 2000 to almost $60 a barrel, the 77-year-old Texan sees no reason to take his chips off the table. "I can't tell for sure where we're going, other than up," Pickens said in an interview with The Associated Press.

His outlook stems from the belief that a world oil production peak is near and that, while the world won't soon run out, supplies will remain tight due to rising consumption and geopolitical uncertainty in the Middle East. The high prices haven't yet taken the wind out of the U.S. economy, he said, because of efficiency gains made over the past 25 years. Down the road, however, he anticipates more serious pain at the pump until, eventually, fossil fuel consumption tapers off and alternatives become more popular.
(22 June 2005)Brad Foss, the AP reporter who wrote this piece, is the same reporter who wrote the CERA article that was picked up by over 100 news media yesterday.

It's Reader Participation Day Here at TOD...Kurt B., The Oil Drum
...I have thought about how to demonstrate the declining production paradigm, and came up with this simple demonstration. Take an average alcoholic. Take a 20 ounce tumbler, and stuff a new clean sponge in the bottom. Pour a fresh pint of dark beer in the tumbler and top it off with a little more, so the alky knows at least there is a full 16 ounces in the tumbler.

So there is known quantity (proven reserves) of dark beer (oil) in the tumbler (world), plus a little more (undiscovered reserves). Have him drink to his hearts content. The first few sips of the fresh sweet beer (light crude) goes down easy, and soon he is drinking away (increased consumption). After about half the beer is consumed, he suddenly realizes the beer has stopped flowing freely out of the cup (mature fields). He knows by the weight and looking in the cup (geological surveys), that there should still be about half a beer left in the cup (Hubbert's Peak). He tilts the cup further up, but the slower trickle just isn't as satisfying (demand not being met)....
(22 June 2005)

The Refinery MythCalculated Risk (blog)
...Since demand for crude would be fixed with a bottleneck, any additional supply of crude would depress the price of the raw material (crude oil). Therefore the lack of refining capacity could only depress the price of crude and would not contribute to the rise in the price of crude - the opposite of what is being reported. Adding more refining capacity would increase the demand for crude oil and could lead to higher crude oil prices, unless additional supply of crude is brought online.

Perhaps the Saudi oil minister has ulterior motives for blaming refining for the high price of crude oil, but that doesn't mean the financial press should perpetuate the myth.Calculated Risk [is written by] a senior executive, retired from a public company, with a background in investing, finance and economics.
(22 June 2005)

Dust off the bike - oil spikes againStaff, Oakland Tribune
Area motorists ponder cause of crude record, plan for pump pain
----------
OAKLAND — Just when you thought it was safe to go back to the gas station with prices gently subsiding, crude oil swelled to its all-time high Monday at nearly $60 a barrel — no doubt a harbinger of surging gasoline prices to come.

So we asked some folks around town in Oakland why they think the cost of oil continues to go up, up and up, way beyond reason. And how it might affect them in their daily lives.

"I usually don't do too many road trips, but prices going up again would definitely discourage me from taking even shorter trips down to Southern California and Arizona this summer. I'll just keep taking BART every day to work. The high prices have got me sold on BART."

"Oil must be harder to get right now, is why it's going up again," said Leonard Camden of San Lorenzo. "I'll probably take one less trip to the store. Combine trips. That's all you can do." Charles Johnson, 50, of Oakland is certain the record-high oil prices have "something to do with the war," he said.

"They're holding the oil back to make the prices go up. What you see is not always what it is. It's a smoke screen. They've got the oil, but they're holding onto it. Isn't that what we went to war for?

"Gas is never gonna go under $2 a gallon anymore anyway," Johnson added, shaking his head. "Those days are gone. Everything else goes up too — cost of living, taxes. It'll never come down, so we have to get used to it. I'll just walk more. It's more exercise."

Steve Minellone, 38, of Pinole said the problem comes from the fact that the oil industry is not regulated by the government.

He added that ever-increasing gas prices "would make me think twice before buying a high-end, high-consumption vehicle like an SUV, that's for sure."

"Why isn't the government saying this is a disaster, and we need to reduce consumption?" asked Hilary Fox, 40, of Oakland.

"Instead, they say we'll just drill the Arctic national wildlife areas so people can drive Hummers. Apparently, that's the solution.

"I got my bike fixed up two weeks ago, so I'll be biking more anyway," she said. "And I would do it even more if we had better bike paths in Oakland."
(21 June 2005)

Politics and EconomicsMichael Bagley - From Capitol Hill:
Latest on the energy billMichael Bagley, Global Public Media
For the second straight week, energy bill and appropriations work are among the big issues items on tap in Congress as there were signs late last week that a compromise was closer on regulating greenhouse gases, one of the most contentious issues for the Senate debate on the energy bill.

A top aide to Senate Energy and Natural Resources Chairman Domenici Friday gave the strongest indication yet that Domenici might be close to signing off on a draft plan from ranking member Jeff Bingaman, D-N.M., that mandates a reduction in projected future growth of greenhouse gas emissions.

That would represent a broadening of congressional support for mandatory controls, while putting Domenici at odds with the Bush administration and many Republicans who prefer voluntary, incentive-based approaches to combating global warming. Sen. Chuck Hagel, R-Neb., will offer an amendment this week representing the administration's philosophy.
(22 June 2005)

That was the response by the leader of the Movement Toward Socialism
(MAS) to threats by transnational corporations to legally counteract the
demands for nationalization of Bolivian oil. These corporations claim to
have signed contracts with the Bolivian government over the past decade
allowing them to conduct the extraction and appropriation operations of
Bolivian oil.

However, Morales, in a statement to journalists in La Paz, noted that
those contracts are illegal because they were not ratified by the
Bolivian Congress, as is stipulated by the country's Constitution.

Not only are they illegal, they are also unconstitutional, just as the
Bolivian Constitutional Court ruled, Morales affirmed.

"I would really like for them to sue in the courts," the popular leader
added, "because we have the legal and technical arguments to win any
trial. Perhaps, instead of Bolivia paying out compensation to these oil
companies, the latter would have to compensate our country for the
illegal and unconstitutional extraction of our oil."

The MAS does not oppose the presence of foreign oil companies in the
country, he explained, but it does demand that the Bolivian state
exercise its right to ownership of mineral deposits, including oil, and
that it establishes associations with those corporations in order to
share the benefits.
(21 June 2005)Also see the long article by Christopher Parenti in The Nation: Bolivia's Battle Of Wills.

Nigeria and Morocco: Oilfield Development and Inter-Ethnic TensionSam Vaknin, Global Politician
...As power shifts to municipalities and regional administrations, they begin to examine development projects more closely, prioritize them, and properly assess their opportunity costs. The multinationals, which hitherto enjoyed a free hand in large swathes of the third world, are unhappy.

The outcome of this tectonic shift is a series of unrequited conflicts from Indonesia to Morocco. ...Some multinationals are in denial. They confront the local authorities and the authorities, in turn, legislate to prevent them from doing business (as in the case of Cemex, the Mexican cement company, described in "The Economist"). Others adapt, collaborate with the locals, establish foundations and endowments, invest in local infrastructure and in preserving the environment. Most crucially, bribes that once went exclusively to Jakarta-based officials, are now split with local politicians.

But sometimes the consequences are more serious than the reallocation of backhanders. When a corrupt central government colludes with multinationals against the indigenous population of an exploited region - all hell breaks loose.

EU Energy Commissioner Andris Piebalgs said 60 billion euros ($73.12 billion) a year could be saved in fuel costs in the 25-nation bloc.

A household could save up to 1,000 euros a year in electricity and heating bills by using energy saving lightbulbs, getting rid of old fridges and replacing boilers, he added.

"If we (are) making good progress on energy efficiency, we are decreasing dependency from oil prices and at same time creating jobs in the sectors related to energy efficiency," Piebalgs told a news conference.
(22 June 2005)

Biomass ChemistryJames Cascio, WorldChanging
"Peak Oil" continues its march to memetic dominance, and a greater number of pundits and politicians not previously known for talking about the environment have started to ask what happens when oil runs out. For many who embrace the "Peak Oil Is Here" idea, the answer is simple: chaos, because petroleum is at the heart of much of industrial and agricultural production, not just transportation.

But that's not the only scenario. There has been quite a bit of research into alternative means of producing the materials we now make using oil. Biomass is the top candidate for oil equivalents, and indeed biodiesel has been getting more attention of late as a renewable and low-net-carbon method of fueling vehicles, both by renewable energy advocates trying to move away from fossil fuels and by researchers trying to improve the efficiency of biodiesel productio
(22 June 2005)

SOLOPEC Nations Warn Sun's Output May Fall Short of DemandStaff, The Onion
RIYADH, MUHAMMAD ARABIA—The governing board of the Solar Output Power Exporting Countries announced Monday that, in spite of attempts to raise production levels, increased global-power consumption may begin to outstrip the sun's output by early next year.

"Our solar-accumulation arrays in Muhammad Arabia, Iraq, Jordan, and Mexico are operating at full capacity, and still, we're struggling to meet demands," said Muhammad Arabia's Prince Fayahd al-Saud, whose family has controlled the world's energy market for more than 100 years. "In a very short time, the sun will not be able to meet the world's energy needs."

SOLOPEC, formed in the '20s to regulate solar-energy prices, currently includes the sunlight-rich nations of Kuwait, Libya, Nigeria, Qatar, Muhammad Arabia, United Arab Emirates, Mexico, Venezuela, Iran, and Iraq.

The consortium supplies more than 90 percent of the world's solar energy, generating 35 billion charge-pads daily. Solar futures traded on the Newer York Exchange have risen 53 percent this year, with prices exceeding 55.6 credits per 400 ArabThermalUnit charge-pad as of June 14.

While some accuse al-Saud of engineering the shortage to increase prices, as his SOLOPEC energy embargo achieved in the '30s, al-Saud insists that production increases are not possible at any price.

"We increased quotas to actual output levels two years ago," al-Saud said. "Barring a sudden slump in demand—which is unlikely—or a series of powerful solar flares, we're looking at energy shortfalls through the next year."

With an output of 4x1026 watts per second, the sun was considered an inexhaustible energy supply when SOLOPEC was formed 30 years ago. However, if growth continues along the current trajectory, that amount will be inadequate to fuel the Cuba/Newer York/Boston megapolitan corridor as soon as 2070.

MIT scientist Glen Schraeder said he predicted the shortage a decade ago.

"The U.S. must reduce its dependence on foreign solar power," Schraeder said. "The sun was created billions of years ago, with the formation of our galaxy. When its unused energy output is gone, it's gone. We must look for alternative energy sources throughout the universe now."
(23 June 2005)